Natural Gas Update August 25,2025

Overview

Natural Gas--October NG is down 4.7 cents
NG is lower as below average temperatures are forecast for the next 7-10 days. Celsius Energy commentary says that the end of summer forecast is one of the coolest of the Millennium.

Atlanta will see temperatures from August 26 to September 3 that are forecast to be 5 to 12 degrees below normal. Dallas will see temperatures that are anywhere from 8 to 14 degrees below normal during the coming 10 days. Chicago will see highs that average 3 to 14 degrees below normal. (Weather Channel)

Asian spot LNG prices fell slightly during the past week amid high storage inventories, continued weak demand and lack of progress on Ukraine peace talks, Reuters said. "We expect further downside to Asian LNG prices, as storage levels remain elevated, while the supply picture continues to firm," said a gas analyst at Kpler. Although Japan's summer heat continues, demand for November heating is lagging. Meanwhile, China is leaning more heavily on domestic gas and pipeline imports, reducing reliance on spot LNG and South Korea is well-stocked, exerting further downside pressure. Kpler's analyst adds that "spot prices may need to test below the $10/mmBtu threshold to revive meaningful buying interest." But, according to Bloomberg, North Asian LNG buyers China, Japan and South Korea are raising imports to restock inventories depleted over a hot summer after muted deliveries in recent months.

CME data for NG futures from Friday's trading shows open interest rose by 15,417 contracts, even as September open interest fell by 7,415 contracts. We believe that mostly new shorts were added in October and December through March.

The Baker Hughes gas rig count issued Friday was unchanged.

CFTC data shows money managers reduced their net short positioning in futures/options on the CME by 13,967 contracts in the week ended Tuesday August 19. This was achieved mostly through shorts being covered. The net short position fell to 36,785 contracts.

Technically the NG spot futures contracts has fallen 5 weeks in a row and has settled lower in 8 of the past 9 weeks. During the past 5 weeks the spot futures have fallen by 24.32%. Thus, the steep drop has seen the momentum fall for the NG basis the weekly chart to an oversold condition.

The October NG sees support at 2.699-2.705 and then at 2.651-2.660 via DC chart values. Resistance lies at 2.866-2.869. There is a gap on the October daily chart currently to the Friday low at 2.787. Momentum basis the October daily chart is getting near oversold.

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Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC